Global markets took a nosedive as concerns over inflated AI valuations sparked a widespread sell-off across the world’s leading stock exchanges. The slump followed cautionary remarks from banking executives warning of a possible market correction.
In the United States, the Nasdaq fell by 2 %, and the S&P 500 dropped just over 1 %. The pullback marked one of the worst sessions in recent weeks, with technology shares leading the declines. Nvidia, Apple, and Amazon were among the biggest losers.
Palantir Technologies slid nearly 8 %, compounding losses after reports that investor Michael Burry had shorted the company along with Nvidia. His bearish bets raised alarm among investors who fear a repeat of past market bubbles.
Morgan Stanley and Goldman Sachs executives added fuel to the fire by warning that high valuations could make the market vulnerable to correction. Their remarks followed similar comments by JPMorgan’s Jamie Dimon earlier in the year.
Asian markets mirrored Wall Street’s unease, with Japan and South Korea both experiencing more than 5 % declines. European indices also opened in the red, though losses were more moderate.
Analysts highlighted that while AI is expected to transform industries, actual profits remain limited to a few tech giants. Deutsche Bank’s Jim Reid said investors were entering a “risk-off mode” after months of relentless optimism.
Bitcoin was caught in the downturn, slipping below $100,000 for the first time in months. The cryptocurrency’s decline underscores how investors are pulling back from speculative assets as economic uncertainty grows.